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Bitcoins: Before you invest, know ALL the facts and insider secrets

Bitcoins: Before you invest, know ALL the facts and insider secrets
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Bitcoin. It’s all over the news. The volatile cryptocurrency has made some people rich, but it’s also subject to dramatic drops alongside equally dramatic rises in value. You’re curious. You want to dip your toes into the Bitcoin waters, but you want to do it as safely as possible. Fortunately, there's a simple way to buy Bitcoin.

Before you pull out your pocketbook, make sure you know what you’re getting into.

If you have questions about what Bitcoin is and how it functions, then check out our Komando primer covering your most pressing questions about the electronic currency.

Buyer beware

If you follow the news about Bitcoin, then you’ve seen how its value can jump around all over the place. As with any investment, there is a risk you could lose your money. If you’re uncertain, then read up on our advice as to whether or not you should buy Bitcoin. Some financial experts are concerned that Bitcoin’s bubble could burst, so a lot of this depends on your personal tolerance for risk.

The easiest way to buy Bitcoin

Some people are involved in what’s called “mining” Bitcoin, but this is a complicated process that we’re not going to delve into. Instead, we will look at how you can just buy Bitcoin outright. For this, most people turn to an exchange, with Coinbase being one of the most popular. Just be aware that demand for Bitcoin has put a squeeze on the exchanges, which may sometimes suffer from temporary outages.

We’ll stick with Coinbase as an example since it offers an interface that’s friendly to new users. Coinbase has hosted over $50 billion in digital currency exchanges and served over 10 million customers, so it’s a well-established place to go for your Bitcoin needs. It also offers a handy app you can use to buy, sell, and manage your Bitcoin on the go.

Link an outside account

Start by signing up with an email address with Coinbase, which will then walk you through the account set-up process. The dashboard will show you the current price of Bitcoin and recent changes.

To complete your account, you will need to add a payment method using a bank account, credit or debit card, or a wire transfer. Coinbase suggests using a bank account or wire transfer if you plan to invest large amounts, but a credit card will work for smaller investments. Follow the instructions to verify your payment account. Be aware that Coinbase charges certain conversion and transaction fees when you use the service, so calculate that into your costs.

Bitcoin has a cousin. Here’s what you need to know about it.

Buy Bitcoin

Now that you’re all signed up and have a payment account linked, you can actually purchase some Bitcoin. This is as simple as clicking the “Buy now” button in Coinbase and choosing how much you want to spend. The value of a single Bitcoin can fluctuate at any given moment, though it was recently at around $15,000. That just means you may end up buying just a fraction of a Bitcoin when you complete your transaction. With Coinbase, you can also choose to invest in the alternative cryptocurrencies Bitcoin Cash, Ethereum or Litecoin.

Now what?

So now you own some Bitcoin and it’s sitting in your digital wallet with Coinbase. You can leave it there and hope it gains in value, sell it on the exchange, or use it to purchase products or services from places that accept the currency.

More exchanges

Coinbase isn’t your only option. You can also check out another U.S.-based exchange, Gemini, or look into Kraken, which supports a large variety of cryptocurrencies, and the London-based CEX.IO. For new users, Coinbase may still be your easiest introduction to the wild world of Bitcoin investing. Will Bitcoin continue to rise? Will it crash? Those are the big questions everybody is wondering about. We'll just have to see what happens.

For a more in-depth discussion on Bitcoin, you'll definitely want to listen to our podcast

Click the play button below and you can even listen while working on other tasks. Simply keep the tab with the podcast open and get to work.

Let’s keep talking about money. You can make some extra cash online if you know where to look.

There are legitimate internet jobs out there that let you earn from the comfort of your own home.

Click here to find out about eight easy and safe ways to make money online.

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